Extended warranties apply to automobiles as well as other consumer products. They are normally not worth their cost. In fact, these "Extended Warranties" are not warranties at all. They are more properly called service contracts. These agreements are usually sold by car dealers for $1,000 to $3,000 with a new vehicle. Through a service contract, you pay an independent warranty company, an administrator, up front to pay for repairs for covered problems with your car in the future.
A car dealer will try and pressure you into paying for a service contract by suggesting that repairs will come up after the warranty expires and you'll save money by buying this contract. A service contracts are usually a huge source of income for the car dealer. Typically 50 percent of the money goes straight into their pockets. The reason for this is that the coverage is usually not at all what you expect.
Most of these these contracts have exclusions like these:
No maintenance records. you need to be able to produce records proving that you have maintained their vehicle according to the manufacturer's maintenance schedule. If you don't have proof, you don't get coverage.
Wear and Tear? Normal wear items such as brake pads and shoes, gaskets, hoses, clutches, shock absorbers, and belts are typically excluded. These are the items that are expected to "wear out" through normal use of the vehicle and are the owner's responsibility. These items are the ones most likely to require repair during the first six years of your car's life.
Damage caused by a noncovered part. Your contract may cover the entire powertrain but if a non-covered parts such as a hose should break and this causes major engine damage, the contract will not cover the engine damage, because the hose was not covered part.
"Investigative surgery" like you leave your contract is not going to cover "exploratory surgery" on your car to find out the problem is, unless the problem turns out to be covered. This sometimes means you're going to pay part of the repair costs upfront before the garage even starts to investigate the problem.
Limited Choice of Repair Facilities?Many people also encounter difficulties in obtaining repairs for their vehicles because the service contract restricts the choice of repair facility. These agreements will require you to have your vehicle repaired at a specific or limited number of repair facilities. Sometimes, due to an Administrator's track record, a repair facility will not honor the service contract and instead insist on payment from the consumer, leaving you to try and get reimbursed from the administrator.
With all of the above hurdles, it is hard to imagine receiving any peace of mind if you actually need to use your service contract. Additionally, with the quality of today's vehicles the odds of needing a major repair during the first six years of your car's life are slim. The bottom line is to save your money. In most situations you will be farther ahead monetarily and have greater peace of mind by saving your money for a rainy day.
About the Author:
Karl & his partners cover important legal issues such as Warranties & Auto Issues at http://lemonlawyer.wordpress.com They focus on California Lemon Law issues & are well known lemon law attorneys for southern California
0 comments:
Post a Comment